“Stuck with Canada”? Understanding what this means from a HR perspective
In July 2013 an established US company was seeing an increased demand for their product in Canada. The demand became so great that they required someone on the ground in Canada to service their customers. That’s when I met Sandie, the company’s Human Resources Manager. Sandie handled their U.S. Human Resource functions with ease. She knew all the fine print of US legislation and everything you could know about employing in the U.S. So when (in her words) she “got stuck with Canada”, the employment differences were overwhelming to her.
That is the general feeling of the HR professionals I speak with across the U.S. when they are placed with the responsibility of overseeing Canadian operations. They take on the task wholeheartedly expecting a similar employment relationship as the one they are familiar with in the U.S. However, they quickly realize that their employment agreements aren’t applicable in Canada, that many of their policies break Canadian laws, and that they can’t just terminate employment “at will”. Yes, Canada has very different legal protections for employees.
What are the risks of not being fully prepared to enter the Canadian Labour force?
- Human Rights Complaints – payment of general damages for discrimination, wage loss recovery, reinstatement to a position, public interest remedies, forced sensitivity courses, and human rights training. The average award in 2012 was approximately $10,000 per complaint.
- Employment Standards Violations – the law in some provinces has extended the period the commission or tribunal can go back from 6 months to 2 years. This includes payment and penalties for missed overtime, vacation Pay, hours of work, misinterpreted exemption status etc. These can be costly oversights, especially in jurisdictions that will reach back for years of data.
- Legal Ramifications – wrongful dismissals, constructive dismissals, harassment, defamation, etc… and you can pay a fortune in these cases (in legal fees alone, notwithstanding the award to the employee).
- Independent Contractor Misclassifications – back-payment of all Canada Pension Plan and Employment Insurance contributions, benefits and any penalties associated.
Each of these danger zones are heavily employee favoured in Canada. The best way to keep out of hot water is to be prepared. Be sure to research and understand the implications of what you say and do with your Canadian workers. Be cautious about assuming that what works in the U.S. will work in Canada.
These resources will help you stay on track:
Canadian Payroll Association www.payroll.ca
Canadian Human Rights Commission http://www.chrc-ccdp.ca
Labour Standards Across Canada www.cic.gc.ca/english/work/labour-standards.asp
Canadian Center for Occupational Health and Safety www.ccohs.ca
HR Options Consulting and Outsourced Employment www.hroptions.ca
Up until now I haven’t said anything that will help avoid the “stuck with Canada” feeling, in fact, I’ve probably made it worse. However, there is an alternative to help unburden you from your Canadian woes. A fully Outsourced Employment Provider will not only handle the payroll and taxation of your Canadian staff, they also act as a full HR Department. They assist with all employment related issues and ensure your company stays out of the danger zones! A qualified Canadian HR Consultant can also be a great resource.
I have only scratched the surface of what needs to be considered when you employ in Canada. There is also payroll, health and safety and mandatory trainings to consider. Sandie chose an Outsourced Employer for her Canadian team and has not had a single issue or concern with her Canadian division, which has grown and is thriving. When you get delegated to oversee Canadian operations, there is nothing wrong with reaching out for help before you end up in a “sticky” situation.
Stacy Glass, CHRL is a Senior Human Resources Consultant with HR Options. Stacy has a wide range of human resources generalist experience that includes advising on appropriate hiring practices, employment contract creation and enforcement, addressing employee relations issues with counseling and disciplinary actions, ensuring company policies are legally compliant and consistently upheld to reduce the risk associated with provincial and federal employment law.